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Family Matters No. 53 - June 1999

Costs of children in Australian households

New estimates from the ABS Household Expenditure Survey
Rebecca Valenzuela

Abstract

For many years, the Australian Institute of Family Studies journal, 'Family Matters' has regularly published two estimates of the costs incurred by Australian parents in raising children. One estimate is based on a Basket of Goods Approach, originally developed by Kerry Lovering in 1984, and the other is grounded in a Survey Expenditure Approach, initially developed by Donald Lee in 1989. There has been a growing recognition that both measures need to be replaced by fresh calculations based on new research. As a result the Institute will discontinue publication of the updates of these figures, and in this issue of the journal publishes two articles which explore how the complex issue of estimating the cost of children can best be approached. This article calculates estimates of the money costs of children based on actual expenditures incurred by families in the years 1984, 1988-89 and 1993-94. The costs of children are estimated by comparing the expenditure of families with children to those without children to determine the child's share of family expenditure. These money cost estimates, also known as equivalence scales, are used to show how much income families with different numbers and ages of children would need to achieve comparable standards of living. The other article, by Peter Saunders, examining costs of children also appears in this issue of 'Family Matters'.

For many years, the Australian Institute of Family Studies journal, 'Family Matters' has regularly published two estimates of the costs incurred by Australian parents in raising children. One estimate is based on a Basket of Goods Approach, originally developed by Kerry Lovering in 1984, and the other is grounded in a Survey Expenditure Approach, initially developed by Donald Lee in 1989. There has been a growing recognition that both measures need to be replaced by fresh calculations based on new research. As a result the Institute will discontinue publication of the updates of these figures, and in this issue of the journal publishes two articles which explore how the complex issue of estimating the cost of children can best be approached. This article calculates estimates of the money costs of children based on actual expenditures incurred by families in the years 1984, 1988-89 and 1993-94. The costs of children are estimated by comparing the expenditure of families with children to those without children to determine the child's share of family expenditure. These money cost estimates, also known as equivalence scales, are used to show how much income families with different numbers and ages of children would need to achieve comparable standards of living. The other article, by Peter Saunders, examining costs of children also appears in this issue of 'Family Matters'.

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